The Marketing Mix and Business Strategies - Case Study Example

Marketing Assignment I. Executive Summary II. Business Mission III. Analysing Business Opportunities IV. Developing Business Strategies V. Marketing Decisions VI. Developing Marketing Programs VII. Managing, Controlling and Feedback Mechanism VIII. Conclusion I. Executive Summary Every year there is a huge number of people who leave their native places and go to the gulf countries to earn their living. Sometimes these people leave for short terms which is for couple of days to couple of months and sometimes they immigrate to some other country and live their for longer period or forever. Leaving the native place and living in some other country is exiting, giving new opportunities to be a part of a new culture etc but at the same time there are many things which a person can miss when he goes to other country; family, relatives, friends, places and food. This assignment is based on the latent need of the home food. This is the item many a times people ask their friends and relatives to bring from their home country. The case focuses on the Western Expatriate Community in Bahrain, Qatar and Saudi Arabia. The number of western people in Saudi Arabia is considerably higher than other two places. The case analyses the environment, talks about the marketing mix and business strategies to be followed. II. Business Mission: The objective of the company is to meet the need of a niche market for their food requirement profitably. III. Analysing Business Opportunities To analyse the market we need to collect various, internal and external information of the company and its environment. In short we need to do SWOT analysis. Through this analysis we can collect information on the strength and weakness of the firm. The environmental scanning will give us information on opportunities and threats existing in the business environment. Apart from this consumer analysis will give the idea about the preferences, choices and demand analysis. Environmental Analysis: Here we analyse the macro and micro environment of the business. In macro environment we take the social, demographic, political, legal and technological Information. Macro Environment Demographic Factors Western populations living in Qatar, Saudi Arabia and Bahrain is considerable. These people are those who came to this country for the better earning opportunities. For instance according to CIA data in Qatar the population of British, other Europeans and Americans are 4,000, 2,000, and 5,000 respectively who reside here. At the same time there are around 100,000 Westerners in Saudi Arabia. The data for Bahrain is also quite considerable. These people usually have a decent life with all the modern facilities and standard of living. They somehow have accepted the cultural differences. But still the place where you brought up gives you several small and big things which can not be found anywhere else. One of these is food. The kind of food a person eats is an essential part of his life. A person also feels alienated when he has to change his food habits. This the reason why people whenever they find someone coming from their home place ask to bring the food items from there. This group of western people has good purchasing power and usually they eat outside home very frequently. The majority of them are male and mostly of the age group of 25 to 45 years. Social Factors The social and cultural setup from the place they come that is western liberal countries to the conservative setup like these countries. These countries have different regulations regarding women, alcohol and various other issues. They are mainly dominated by Islamic religious rules and regulations. While starting any business for the people residing in these countries all these social, cultural and religious issues should be taken into account. Political Legal and Technological: These countries follow conservative Islamic laws. They have strict legal system especially Saudi Arabia where strict rules are there for any kind of crime. Technologically all the advance equipments and modern life facilities would be available to them. Micro Environment Market Potential As from the above information we can say that there is a latent demand and niche market existing. There are around 100,000 people alone in the Saudi Arabia. The number is less but profitable. The market can be developed. This latent demand is for the ‘Taste of home Food’. The target consumer is from the segment that can pay premium for this service. Competitors: All the food joints and the places offering food are competitors. Though there is no direct competitor at present. The giants like Mc Donald, Burger King, Taco Bell, Subway, Kentucky Fried Chicken, Kenny Roger’s Roasters etc are there along with several other small and big restaurants and hotels. The competition with them will be high. The company has to place itself with a clear USP (Unique Selling Preposition). Suppliers and Distributors The food business is based on the supplies it gets. The decision regarding the operations and procurement should be taken very carefully. The raw material needs to e procured at low price but quality should not be compromised on that. Analysis Based on Porters Five Forces Model This model is very useful to identify the attractiveness of the sector. The five forces are Potential Entrants The potential entrants in the same segment will be the company already into the food business apart from the individuals. Every business which gets success in the market faces this threat. The USP one has will not be USP in future. It will be copied very soon. So before the unique selling proposition (USP) gets diluted “A Taste of Home” has to make its strong position and occupy the top of the mind position among target customers. Buyers Power The buyers’ power in a niche market is always limited. So the company needs not to worry too much about it. Suppliers Power Due to low margins and commission and mature markets the suppliers’ power will be less for the company sourcing for the western countries. Threat of Substitutes The largest threat of substitute is all the companies offering food items. There is no direct substitute in this segment. But it’s a profitable risky segment. Segment Rivalry There is no direct rivalry in this segment. If the food industry is considered the rivalry is immense. But in the niche segment always offers exclusivity to the marketer. Porter’s Five Forces Model of Segment Attractiveness. Hence on the basis of above analysis we can say this segment is attractive. IV. Developing Business Strategies The business strategies will include the financial planning, human resource planning, operations planning and marketing planning. Financial planning: The capital budgeting for the overall operations would be required. The breakeven point forecast, several operating expenses etc need to be identified. The sources of funds, availability of cash and other resources required to run the business, fixed and variable cost each factors need to be identified and analysed before. Human resource planning: It depends upon the level company starts its operations. Like if it starts with one country one location the requirement of the personal will be different. The other factors here are the need of recruitment, selection and training of the employees. Operations planning Every step of the business operations from the customer placing the order to the delivery of the orders should be identifying in advance and the protocol of the steps should be developed so that any error can be rectified as and when it happens. Marketing Planning What kind of strategies adopted in this scenario. This demand can be met in 3 ways. 1. Opening up Eating Joints 2. Opening up a service for delivering food items collected from the residing countries. 3. Both the services First of all we nee to decide our business mission what exactly we want to for the customers, how we will meet the services with the need of the customers. How much we want the customer to pay for us? Are we looking for volumes or we looking at the premium for profits. I have chosen the option of both. Here the eating joints on the western styles are opened. The menu contains the food of western taste in general and very specific food, where the taste matches with the western home recipes. The Sandwiches, steaks, juices, drinks (which is permissible by the Government there), can be served like a regular routine of a western household. The menu should be of two types. One is targeted to the volume. This is the regular eating items, low calorie, healthy and low fat items. The other menu includes the special items which are not available in any other restaurants. We must not forget about all the big restaurants chains such as McDonalds, Burger King, Taco Bell, Subway, Kentucky Fried Chicken, Kenny Roger’s Roasters, Pizza Hut, and others. They do have products of all range and specific products as well. Since we are looking at niche market mainly we will be at a safer side if we keep the price low which are offered by all the giants and price high for that latent demand. The delivery service can be started with the tie up with some good courier service that has network in the European and other western countries. People who are waiting for their friends and relatives to come and bring the supply of the food items will have opportunity to place their order with the restaurant and the restaurant delivery wing can coordinate with the courier company and get the supply of that particular item from that place. So this will give an opportunity to the western expatriate to fulfil their needs without waiting for the relatives and friends. The service can have various packages like if the product is being picked up from their home the charges will be different. Different service and product package can be prepared based on the demographic and political –legal setup of that particular country and population targeted. The business strategy will include the other information as well V. Marketing Decisions The various marketing decision will be based on the environment analysis and SWOT analysis. These marketing decisions will be related to Marketing Mix which is as follows Product /Service Price Place Promotion Food Items to be served in the Food Joints Two Different Pricing Strategies Bahrain Qatar Saudi Arabia Publicity Advertisement Food Items to be delivered from the native markets Premium to be charged for the products serving niche segment Discounts Food items to be delivered from their families Other regular items should be placed at lower price. Special Offers Product Strategy The products as are food items and targeted to a very specific segment, the emphasis should be on hygiene, quality, taste and delivery. The research which will be conducted for the market analysis will provide the proper inputs about the food items consumers willing to eat and which are not available in these country as per the taste. Pricing Strategy Through the consumer research the input regarding the price consumer will be ready to pay can be analysed and decided. The premium which can be charged and which consumers will be willing to afford for the service. All these information will be collected through this research. Place Where would consumer like to avail the service of “A Taste of Home” at his home or outside? These inputs will be collected by the research. Even if the consumer want to have an eating joint experience that can be offered in the restaurant which will have the ambience, staff and the interiors according to the western taste. This will offer an opportunity for them to be in the liberal environment as some of the residential places offer in Saudi Arabia. Apart from these the home delivery options will be available for the customers, so that they can enjoy the taste of home at their residence. Promotion Our target group is educated and from the high earning group of these countries. The promotional strategies can be as follows: Publicity: The newspapers and the leading publications will carry the positive articles about the service. It will emphasize on the need and the high quality services offered by the company. Apart from these the means of promotions can be: Internet: these people and their relatives will be accessing e-mails and internet services. It will be good to use website and have a website for the offerings with the service of placing order over the internet. VI. Developing Marketing Programs The marketing programs includes the decisions regarding the following Marketing Channels Communication Sales and Distribution Price Marketing Channels To decide about the marketing channel, one needs to analyse the output he wants to deliver to his customers and the resources available with him. Terms and responsibilities of each intermediary can be explained clearly to them to avoid any kind of problems in product and service delivery. There are three distribution strategies available to a marketer according to Kotler, exclusive, selective or intensive distribution techniques. I believe for this case, Exclusive distribution techniques should be followed. This is a niche market where the marketer wants to enter he needs to control the service standard as well as the output of the service. The channel members should be trained and equipped with all the necessary material from the parent firm to deliver high level of service. Communication The communication strategy should be based upon the objectives of the company. It can be in five forms. Advertising, Sales promotion, Public relations and publicity, personal selling and direct marketing. To decide about the communication tool the communication objectives should be clear. There are several models used in this. We can discuss it with AIDA model. Attention Interest Desire Action (Kotler, Marketing Management, Page 555,) The objective here would be to gain the attention of the prospects at the first level which is also known as a cognitive stage. At the second level marketer tries to create an inculcate interest followed by desire to try out the product and services which ends with the action of buying the product or service. As discussed earlier as well the best communication tool to be used will be PR and Publicity for the firm and its services. It will be supported by advertising and sales promotions time to time. The message which is going out of the company should contain the message which conveys that the company is fulfilling the unmet need of ‘A Taste of Home’. The frequency and reach should be decided based upon the marketing strategy and the target consumer. Sales and Distribution: The product and services we are dealing with are food and the market we are serving is from the higher section of the society who is living in these countries. We are looking for a premium from them, as we see them as a niche market. We need to be very effective in our sales and distribution techniques. Since we are offering two types of services one is the product available immediately and another is on demand product which will be procured after placing the demand. This call for two different sales set ups. Price: The pricing strategies are based upon the factors like competitors, demand, cost of production, customers’ willingness to pay etc. These things can be found out through market research. Managing, Controlling and Feedback Mechanism: The overall marketing strategies need to be controlled and managed so that the resources are utilized properly and the business objectives are met. All the various operations need to coordinate with each other. This can be done through efficient flow of the information. The management of the information system should be placed so that the information required is available to the staff, management and the various departments. This information will help in controlling, managing and decision making process. VII. Conclusion There are several factors to be considered while entering to a market to cater any latent demand or need. Through analysis of market environment, customer analysis and the various factors of business should be analysed. In this case we analysed a latent demand of the western expatriate community, which is “A Taste of Home”. This is a latent demand and for a very niche segment. A proper business planning, implementation and controlling will give the business man to operate profitably in this untouched market. References Kotler, Philip, Marketing Management, Prentice-Hall Inc. New Jersey, 10th Edition, 2000 Piercy, Nigel F, Market Led Strategic Change, Butterworth Heinemann, 3 e, Charted Institute of Marketing http://foia.state.gov/MMS/postrpt/pr_view_all.asp?CntryID=122 accessed on 20 December 2005 http://en.wikipedia.org/wiki/Saudi_Arabia#Demographics accessed on 20 December 2005 http://en.wikipedia.org/wiki/Demographics_of_Bahrain#Net_migration_rate accessed on 20 December 2005 http://hrw.org/reports/2004/saudi0704/4.htm accessed on 20 December 2005 Read More